Zim firms can recoup Ofac confiscated money


Hebert Zharare
Tens of millions of dollars belonging to local companies and individuals confiscated by the US Government Treasury Department’s Office for Foreign Assets Control (Ofac), can only be retrieved if the affected parties challenge seizure of the money through the US legal systems.

There has been a misconception that affected companies and individual can mount lawsuits through the international courts for them to receive recourse.

However, international law experts this week revealed since the US dollar was not an international currency, this made it almost impossible for some jurisdictions outside the US legal systems to pass recognisable judgements.

An international lawyer, Itai Ndudzo, working for Clairwood Chambers that operates in Zimbabwe and Mauritius and a senior Government lawyer that cannot be named for professional reasons, concurred the money was still in suspense accounts and anyone who successfully challenges the seizures would get it.

Already there is precedence of a case of Zimbabweans who successfully challenged in Southern District of New York court the confiscation of their assets that were mistaken as belonging to the Government of Zimbabwe.

“What I would like to say is remedy does lie in municipal laws of America. One has to go into the legislative measures that led to the confiscation of the money and assess remedies available.

The confiscation is not an absolute rule, if you prove your case you can get your money back.

“This money is just in the suspense account. The remedy is purely in the US domestic system. The people must know there is no remedy outside the American system,” said Ndudzo.

He said these restrictive measures remain in place as long the legislative measures such as the Zimbabwe Democracy and Economic Recovery Act (ZIDERA) remain in place, adding the people have to look at correct laws and remedies available and situate yourself on the context of the remedies.

“Recovering the money is possible but the remedies are purely in America, by American lawyers and in American courts. Remember Zimbabwe is not America’s enemy that is why the two countries have embassies that are running in their jurisdictions.”

Following the new economic order, President Emmerson Mnangagwa has declared Zimbabwe open for investment and many countries in the world have accepted it with renewed hope and a number such as Britain and Spain among others have started warming up.

The country is also implementing a plethora of measures and reforms including addressing policy inconsistences, Government spending and ease of doing business to ensure Zimbabwe becomes an investment destination of choice.

Ndudzo, however, said political processes might not provide quick solutions to the plight of the affected companies and individuals as some of the laws by the US Congress might take too long to be repealed.

Said a senior Government lawyer who declined to be named: “For your own information I am also a victim of Ofac, I have money that was intercepted. At law, one can surely challenge the seizure of the money in the US courts. Cases can be treated on their merit and I am sure some might successfully argue their case and receive their money.”

Commenting on the US dollar, Ndudzo said it is imperative for people to understand international systems and laws. He said the US dollar is just a preferred currency, not an international currency and for that reason, its use is subject to municipal laws.

“When you speak of preferred currency, it is the US dollar, but in real essence, it is not international currency, but municipal currency depended upon by many countries in world, meaning it becomes a defacto international currency.

“The monetary authorities for the US dollar remains the Federal Bank of America. It passes municipal laws to safe guard the currency, the same way the Reserve Bank of Zimbabwe do here. It is the custodian of the bond notes.

“It is important to note that the US Congress in its territory as the US Parliament makes laws that restrict the use of the currency to some institutions and individuals. They can say do not allow money from this jurisdiction to be processed and all the money is cleared by the Federal Bank.

Because their money is a defacto international currency, they end up controlling the systems in the world. The moment they detect money coming from restricted persons or institutions, they confiscate it. The Federal Bank penalizes heavily banks that allow transaction from restricted people and institutions,” he said.

Some of the companies linked to the Industrial Development Corporation (IDC), whose funds were intercepted by Ofac include Olivine Industries; $1,9 million, Deven Engineering $200 000 and Chemplex $2,5 million.

Undisclosed number of individuals in the Diaspora, who had paid for residential stands to Sun-way City, a division of IDC had their money also intercepted.

A US-based couple lost over $30 000 it sent to Zimbabwe to build a house in Chinhoyi, while a Chinhoyi University of Science and Technology student in 2009 was blocked by US officials from receiving computer software.


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